AFC issues its five year US$700m Eurobond being the first for 2020

AFRICA – Africa Finance Corporation (AFC), an infrastructure solutions provider in Africa, has issued a US$700m Regulation S Eurobond (Reg S), the AFC’s first bond issuance in 2020. 

The US$700m Eurobond, maturing June 16, 2025, carries a coupon of 3.125%. The bond received strong global interest across Europe, Asia and the Middle East despite the challenging global economic backdrop, leading it to being 3 times over-subscribed. 

“AFC is pleased with the placement of our most recent Eurobond, which reflects market confidence in AFC’s strategy and execution and demonstrates African issuers’ ongoing access to global capital markets,” Samaila Zubairu, President & CEO of AFC, said. 

“The placement’s success and strong subscription rate despite the difficult global economic conditions, reflect the attractiveness of AFC as a gateway to Africa’s infrastructure and industrial opportunities for institutional capital, and will finance the value accretive beneficiation of Africa’s primary commodities as well as create jobs for Africa’s youth.” 

The order book, which reached over US$2.1bn, comprised of high-quality fixed income investors that are seeking exposure to a high-quality investment grade issuer like AFC. 

The distribution breakdown of the order book saw Asia (11%), Middle East and Africa (30%), off-shore US (4%), the United Kingdom (18%), Switzerland (16%), Germany (13%) and other Europe regions (8%) all partaking, demonstrating a keen appetite for African investment from around the world. 

This bond issuance is the fifth Eurobond under the Corporation’s US$5bn Global Medium-Term Note (GMTN) programme, which was recently upsized from $3bn in line with the Corporation’s five-year corporate strategy. 

AFC’s GMTN Programme is rated A3 by Moody’s Investor Services and the bond issuance which is a drawdown under the GMTN program is listed on the Irish Stock Exchange. 

The Eurobond proceeds shall be used for general corporate purposes as the Corporation continues its mission to catalyze industrialization on the African continent. 

“The success of AFC’s most recent bond issuance in a very challenging and fragile macroeconomic environment attests to AFC’s strong market access, the strength of our credit and our well-established investor engagement programme,” Banji Fehintola, Senior Director & Treasurer of AFC, said. 

“Despite recent dislocations in global markets, the successful issuance of this bond will also open the door for other African issuers to tap the bond market this year. The bond proceeds will provide AFC with additional liquidity to continue financing critical infrastructure projects across the continent, in line with our developmental mandate.” 

The bond issuance was arranged by BofA Securities, J.P. Morgan and MUFG as Global Co-ordinators and Joint Bookrunners, together with First Abu Dhabi Bank and Goldman Sachs International as Joint Bookrunners. 

A Regulation S offering is a Bond issued in the Eurobond market for international investors and usually clears through firms like Euroclear and Clearstream. 

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